On April 19 and 20, I attended the University of Virginia (UVa) Venture Summit, a signature event that brings together innovative researchers, entrepreneurs, and investors. The event explored the idea that startups thrive on the relationships they foster in a robust ecosystem richly endowed with innovative research, access to funding and investors, and the sheer entrepreneurial will to create, do something new, or make some existing thing better!
One panel that elicited enthusiastic participation from startups was titled “Innovation: A New Day in the U.S.” On the dais were a venture capitalist (Stephan Dolezalek of VantagePoint Capital Partners); the federal government’s former chief technology officer, Aneesh Chopra; and UVa’s innovation and research director, Mark Crowell. The panel explored how startups thrive and grow, become employers, and stay relevant.
Among the many compelling and interesting points were these four:
1. Making use of innovation is key. Kodak’s recent bankruptcy is a case in point. After inventing the digital camera in 1975, Kodak walked away from the technology and was ultimately overtaken by its competitors.
2. Superstars take a long time to emerge. Michael Dell, founder and CEO of Dell, once commented that if Apple were his company, he would shut it down and give investors back their money (back when Dell was the wunderkind and Apple bounced between hits and misses). It’s all about staying power.
3. Fostering long-term entrepreneurship means inventing the fundamentals before the applications. What does this mean? Well, without computers, the Internet, and smart phones, there would be no e-commerce, social networking, or innovations like Facebook, Google, and Shazam.
4. To achieve long-term job creation and innovation, the model for success must fundamentally change. At the corporate level, overemphasis on quarterly earnings can run counter to job creation and even pioneering new firms. As venture capitalist Stephan Dolezalek facetiously theorized: When the goal of your business model is to sell the company for $1 billion, at a value of $77 million per employee (implying low job creation), job growth will not be the focus. Fundamentally, job growth requires a different mindset and a different set of parameters. Put differently, to cultivate startups as job engines, we might have to grow different types of companies.
What will it take to get back to pioneering new firms and growing jobs through startups? The answer lies in the way we utilize the tools we have: education, entrepreneurship, investment, immigration policy, taxation, corporate governance, and intellectual property rights. How we use these tools will determine whether U.S. startups build the economy we want and need.
—Ngozi Bell, Region III Advocate
Ngozi Bell is the Office of Advocacy’s regional advocate for Delaware, Pennsylvania, Maryland, Virginia, West Virginia, and Washington, D.C. She can be reached at ngozi.bell@sba.gov.